It’s becoming increasingly obvious that, policywise, Donald Trump is a split personality. When it comes to most issues, he’s just plain uninformed and disinterested, making casual, offhand decisions based on ignorance. On the other hand, there are a few issues about which he’s exceedingly well informed and very interested.
A perfect example of the former is the recent performance of the counterfeit president in the Turkish-Kurdish affair embroiling northern Syria. Trump obviously knows nothing of the historic enmity between Turks and Kurds, nothing of the decades-long struggle of the displaced and dispossessed Kurds for a recognized homeland, and nothing of the desire of Turkey to treat the Kurds as it did the Armenians before them — namely, by carrying out genocidal ethnic cleansing in its immediate neighborhood of the Middle East using anti-terrorism as a bogus justification.
More than that, Trump knows little (and cares less) about the Kurdish region of Syria abutting the Turkish border, where the Kurds had attempted to establish a democratic, pluralistic state more secular and Westernized than any other in the Middle East except, ironically, pre-Erdogan Turkey.
By selling out the Kurds to the wannabe dictator Erdogan, despite their pro-American sacrifice (11,000 dead) in fighting ISIS, the Great Pretender in the White House has not only destroyed a nascent democracy, but paved the way for an ISIS revival and set back the reestablishment of genuine democracy in Turkey itself by allowing Erdogan (lately on the ropes) to wave the bloody flag of nationalism. Betrayal? Trump doesn’t know the meaning of the word.
But one thing the Donald does understand is money; it’s been the great quest of his life. It’s also the one area related to government policy that captures his interest and undivided attention.
A case in point is the upcoming summit meeting of the Group-of-Seven nations, which the president had cleverly calculated was a chance to grab for some easy cash by hosting the meeting at his Trump National Doral resort and hotel near Miami. (There is also a Trump hotel in Istanbul, which probably explains a lot about his cozy relationship with Erdogan.) The plainly unconstitutional Doral ploy, since reversed in the light of adverse publicity, would have allowed Trump to bill both the federal government and multiple foreign governments hundreds of millions of dollars for putting on the event.
While he lost out on that bit of plunder, Trump was a big winner in the 2017 GOP tax-cut scam. The tax-policy revision engaged our porcine POTUS’ close scrutiny to ensure its features, as eventually enacted, would benefit not only his class, but he himself. It does. The billionaire club, which includes Trump as a member (#259 on the Forbes listing of the 400 richest Americans at $3.1 billion in net worth), will be collecting the lion’s share of the benefits by 2027, with an estimated one-half going to the top 1% and, according to the Tax Policy Center, individuals in the top 0.1% getting average annual windfalls approaching $300,000. The specifics spell out how.
To refresh memories, the Tax Cut and Jobs Act Trump signed on Dec. 22, 2017, reduced the top marginal income-tax rate from 39.6% to 37%; cut the rate on long-term capital gains (the source of half the income of the wealthiest 1%) from 23.8% to 20%; shrank the corporate income-tax rate from 35% to 21%; increased the estate-tax exemption from $5.25 million to $11.2 million for individuals and to $22.4 million for couples; entirely eliminated the 28% alternative minimum income tax (AMT), which Trump had to pay on one occasion; and allowed noncorporate real-estate companies or partnerships (the Trump Organization includes some 500) to be considered “pass-through entities” and qualify for a 20% tax cut on business profits formerly treated as personal income.
In terms of inequality, the 2017 tax cut took a bad situation and made it worse by using the tax system to shift proportionately more income and wealth upward. It thereby exacerbated a trend that’s been underway for well over three decades, beginning with Ronald Reagan’s “trickle-down” tax cuts and continuing through those of George W. Bush to the latest round under Donald Trump. During this span, the top personal income-tax rate has fallen from 70% to 37%, the top corporate rate from 50% to 21%, the top capital gains rate from 32.5 to 20%, and the top estate-tax rate from 55% to 40%.
Economist Paul Krugman, examining the phenomenon of inequality in his bestselling 2012 book “End This Depression Now,” acknowledged the key role of sharp tax cuts at the top, post-1980, in creating the fabled One Percent — basically, the billionaire-millionaire class. It was a connection initially developed by his fellow economists Thomas Piketty and Emmanuel Saez, long-time students of inequality, who identified a close negative correlation between high-end tax cuts and a quadrupling in the share of national income going to the one percenters over the past 40 years.
Krugman suggested as additional causal factors financial deregulation, deunionization, and changes in social norms and the political climate after 1980. Whatever the precise cause of today’s wealth concentration (certainly not “economic fundamentals”), it’s created an America where, according to a Federal Reserve analysis done earlier this year, the richest 1% have experienced a $21 trillion growth in their combined net worth since the Reagan years, while the bottom 50% have seen theirs fall by $900 billion. Percentagewise, report Saez and University of California colleague Gabriel Zucman, the share of total US household wealth held by the top 1% went from 23% in 1980 to 37% in 2016.
All this is by way of saying the wealth taxes offered by Democratic presidential candidates Bernie Sanders and Elizabeth Warren to ease inequality are long overdue. Since their proposals were aired, the usual suspects have stepped forward with the usual arguments opposing a wealth tax: N. Gregory Mankiw, former head of Bush 43’s Council of Economic Advisors (it would hurt investment); Lawrence Summers, Bill Clinton’s Treasury secretary (it would sap innovation); Jamie Dimon, CEO of JPMorgan Chase (the government would waste the money).
I prefer the wisdom of Franklin D. Roosevelt, whose tax-reform message to Congress in 1935 included the following: “The transmission from generation to generation of vast fortunes … is not consistent with the ideals and sentiments of the American people.”
Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.
From The Progressive Populist, December 1, 2019
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